jocohen Posted April 19, 2009 Share Posted April 19, 2009 "If there is any reform needed it is, perhaps, to review tax relief on borrowing to purchase buy-to-let properties as this gives investors an advantage over owner-occupiers who are not entitled to tax relief on borrowing to purchase their home" from the citywire debate. please tell me that wasn't true, well i thought we had less corruption then most but i was wrong Quote Link to comment Share on other sites More sharing options...
Errol Posted April 19, 2009 Share Posted April 19, 2009 Idiots. So many idiots. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted April 19, 2009 Share Posted April 19, 2009 Some people really shouldn't be given the vote. Quote Link to comment Share on other sites More sharing options...
cashinmattress Posted April 19, 2009 Share Posted April 19, 2009 "If there is any reform needed it is, perhaps, to review tax relief on borrowing to purchase buy-to-let properties as this gives investors an advantage over owner-occupiers who are not entitled to tax relief on borrowing to purchase their home"from the citywire debate. please tell me that wasn't true, well i thought we had less corruption then most but i was wrong Well, as far as slopey shouldered government policy goes, what a payday this whole BTL has been; removing responsibility of housing from the state, to the people. Brilliant on paper... Quote Link to comment Share on other sites More sharing options...
The Ayatollah Buggeri Posted April 19, 2009 Share Posted April 19, 2009 "If there is any reform needed it is, perhaps, to review tax relief on borrowing to purchase buy-to-let properties as this gives investors an advantage over owner-occupiers who are not entitled to tax relief on borrowing to purchase their home" This quote is ambiguous. Does this tax relief currently exist and the writer is arguing that it should be reviewed with a view to possibly abolishing it, or that it doesn't exist and should be granted? If the former, agreed. If the latter, that's insane. There is no shortage of rental properties, as shown by declining rents, and the ongoing HPC shows that residential property is a highly volatile investment of the sort that no-one should be relying on for their long-term security. And even that does not address the many and various social problems, all discussed ad nauseam on this board, caused by pricing out FTBs and forcing others to raise families in cramped and unsuitable accommodation. Quote Link to comment Share on other sites More sharing options...
jocohen Posted April 19, 2009 Author Share Posted April 19, 2009 the quote is within the citywire debate - see hpc homepage. The relief is currently in place and the person arguing it is a good thing to encourage BTL's is actually recognising even tax relief is a step too far Quote Link to comment Share on other sites More sharing options...
Guest happy? Posted April 19, 2009 Share Posted April 19, 2009 "If there is any reform needed it is, perhaps, to review tax relief on borrowing to purchase buy-to-let properties as this gives investors an advantage over owner-occupiers who are not entitled to tax relief on borrowing to purchase their home"from the citywire debate. please tell me that wasn't true, well i thought we had less corruption then most but i was wrong Nothing corrupt about it - in the early 1990's having sold off all affordable housing the Conservatives set about increasing private sector involvement in the rented sector. Through tax breaks (which you mention) and removing tenants' rights i.e. the introduction of the AST, they set the train in motion. This and other tax breaks, plus the poor performance of the stock market led people to get involved in the game. The real kicker was the lowering of the securities required to get into the game - banks happily gave more and more leeway to BTL speculators and the rest is history. No corruption, deliberate government policy under John Major followed through by New Labour cravenly believing (instead of challenging) the free-market guff. Quote Link to comment Share on other sites More sharing options...
mirage Posted April 19, 2009 Share Posted April 19, 2009 I thought this was a well-known pillar of HPC lore. Tax relief on mortage interest allowed BTLers to outbid FTBs, not least because they often bought with interest-only mortages. It is a disgrace. Quote Link to comment Share on other sites More sharing options...
24gray24 Posted April 19, 2009 Share Posted April 19, 2009 I thought this was a well-known pillar of HPC lore. Tax relief on mortage interest allowed BTLers to outbid FTBs, not least because they often bought with interest-only mortages.It is a disgrace. It's a denouement. Quote Link to comment Share on other sites More sharing options...
the_duke_of_hazzard Posted April 19, 2009 Share Posted April 19, 2009 Can you set up a company, buy a place, and then rent to yourself? Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted April 19, 2009 Share Posted April 19, 2009 Can you set up a company, buy a place, and then rent to yourself? Probably but only if your rich and can afford the lawyers if your poor then no. Quote Link to comment Share on other sites More sharing options...
Aidan Ap Word Posted April 19, 2009 Share Posted April 19, 2009 [...]No corruption, deliberate government policy under John Major followed through by New Labour cravenly believing (instead of challenging) the free-market guff. How are tax breaks on something specific (ie: target-focussed deliberate market manipulation) 'free market guff'? I totally agree with you that the NuLabour cronies should have challenged these market manipulations when inheriting policy. But such market manipulation is never 'free market' action. Whether the Tories 'marketed' such action as 'free market' economics or not is unknown to me ... I was busy studying economics (neo-classical, structuralist and control economics) in another country at the time ... How anything to do with taxation (and targeted taxation in particular) could be 'free market' ... ? Perhaps the poilitico numpties have muddied the waters on this ...? Aidanapword Quote Link to comment Share on other sites More sharing options...
Aidan Ap Word Posted April 19, 2009 Share Posted April 19, 2009 Probably but only if your rich and can afford the lawyers if your poor then no. And only if you can find a way to hide this deception from HMRC ... Quote Link to comment Share on other sites More sharing options...
porca misèria Posted April 19, 2009 Share Posted April 19, 2009 Can you set up a company, buy a place, and then rent to yourself? I looked semi-seriously at that. Mostly with regard to an ex-village-post-office with flat above, so the office would become my office while I lived in the flat. Wondered about schemes like a 60/40 joint purchase, or company owns it and I rent the flat. The 'round trip' didn't work for me, for reasons connected with ... probably squeamishness, 'cos my company has a purpose that doesn't involve property, and if I set up another it would have no money (the workaround for that didn't occur to me at the time). Oh, and the mortgage interest rate would've been higher for the company. Quote Link to comment Share on other sites More sharing options...
tim123 Posted April 19, 2009 Share Posted April 19, 2009 Can you set up a company, buy a place, and then rent to yourself? You can, but how does it help? Tax relief on interest payments is only allowable against actual rent collected, you can't offset it against other "employment" income. So, if the company pays 500 pounds in interest and the tenant pays 500 pounds in rent, the company has made zero profit and paid no tax. But if you are the tenant, you will still have paid 500 pounds from after tax income to live in the house tim Quote Link to comment Share on other sites More sharing options...
Guest happy? Posted April 19, 2009 Share Posted April 19, 2009 How are tax breaks on something specific (ie: target-focussed deliberate market manipulation) 'free market guff'?I totally agree with you that the NuLabour cronies should have challenged these market manipulations when inheriting policy. But such market manipulation is never 'free market' action. Whether the Tories 'marketed' such action as 'free market' economics or not is unknown to me ... I was busy studying economics (neo-classical, structuralist and control economics) in another country at the time ... How anything to do with taxation (and targeted taxation in particular) could be 'free market' ... ? Perhaps the poilitico numpties have muddied the waters on this ...? Aidanapword You're right of course it was sold to the electorate as free market. But then the free market like communism will never exist. It's useful as an idea in an economics lesson - the problem arises when people then jump from this theoretical idea into believing it can ever be implemented. Quote Link to comment Share on other sites More sharing options...
Guest happy? Posted April 19, 2009 Share Posted April 19, 2009 Can you set up a company, buy a place, and then rent to yourself? Wasn't this suggested for SIPPs a couple of years ago and then abandoned? What happens if you default on your rent - do you take yourself to court for repossession (presumably if you believe the TPUC guff you deny you're you and prove the court has no jurisdiction by not participating in the process). Quote Link to comment Share on other sites More sharing options...
Mikhail Liebenstein Posted April 19, 2009 Share Posted April 19, 2009 (edited) The trouble with the rent from my own company theory is that it doesn't quite work out. If you were a landlord and received rent from a tenant, you currently get to offset that rent againt the interest payments on the mortgage. This how business expenses are generall treated, as you pay tax on the proft. Now if instead you owned the company that owned your flat, imagine you rent from your own company for £1000 per month. Now suppose thee mortgage has £700 per month interest and £300 repayment, that leaves the company liable for tax on £300 per month. So all you end up doing is paying tax twice, as income tax has already come off the income you use to pay the rent. Then if the company makes a profit, it then pays tax as well, plus you have a CGT issue, which you wouldn't as an owner occupier. So what is actually needed is to bring MIRAS back for FTBers and a tax on landlords. Edited April 19, 2009 by mikelivingstone Quote Link to comment Share on other sites More sharing options...
Ah-so Posted April 19, 2009 Share Posted April 19, 2009 I thought this was a well-known pillar of HPC lore. Tax relief on mortage interest allowed BTLers to outbid FTBs, not least because they often bought with interest-only mortages.It is a disgrace. No it is not. I think that you are confusing the dropped proposal to allow BTL to be placed in private pensions which would have had the effect. The tax relief on mortgage interest payments does not give BTL any advantage whatsoever, but simply allows them to offset the cost of business before paying tax on income received, as any business venture can under UK law, quite rightly. Quote Link to comment Share on other sites More sharing options...
othello Posted April 19, 2009 Share Posted April 19, 2009 There is a petition to sign if you're against the tax break for BTL: Petition Quote Link to comment Share on other sites More sharing options...
Guest happy? Posted April 19, 2009 Share Posted April 19, 2009 No it is not. I think that you are confusing the dropped proposal to allow BTL to be placed in private pensions which would have had the effect. The tax relief on mortgage interest payments does not give BTL any advantage whatsoever, but simply allows them to offset the cost of business before paying tax on income received, as any business venture can under UK law, quite rightly. I question this statement. This point's been made before and others with better business-tax knowledge than I have refuted it - I recall that other businesses cannot offset their borrowings in the way that BTL landlords can. Quote Link to comment Share on other sites More sharing options...
tim123 Posted April 19, 2009 Share Posted April 19, 2009 I question this statement. This point's been made before and others with better business-tax knowledge than I have refuted it - I recall that other businesses cannot offset their borrowings in the way that BTL landlords can. Then you recal wrong. Interest on loans is always a deductable business expense tim Quote Link to comment Share on other sites More sharing options...
Authoritarian Posted April 19, 2009 Share Posted April 19, 2009 (edited) To even the playing field they should also make rent tax deductable, and this would have the added benefit of giving the HMRC all the info they need on landlords' incomes as tenants would have a strong incentive to collect the data. Edited April 19, 2009 by chefdave Quote Link to comment Share on other sites More sharing options...
mirage Posted April 19, 2009 Share Posted April 19, 2009 No it is not. I think that you are confusing the dropped proposal to allow BTL to be placed in private pensions which would have had the effect. The tax relief on mortgage interest payments does not give BTL any advantage whatsoever, but simply allows them to offset the cost of business before paying tax on income received, as any business venture can under UK law, quite rightly. No, that is as I understood it. But I suppose it isn't really a bidding advantage for BTLers because they have to find the interest payments from the after tax income of some renter, just as owner occupiers have to find it from after tax income. Quote Link to comment Share on other sites More sharing options...
redgenieuk Posted April 19, 2009 Share Posted April 19, 2009 Then you recal wrong.Interest on loans is always a deductable business expense tim Correct. Since the dawn of time. Which makes some foolish people beleive "they may as well borrow" when they don't need to. Now thats stupid. Quote Link to comment Share on other sites More sharing options...
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